Parents paying off our mortgage...

[Delboy72]

What is the name of your state (only U.S. law)? Texas.

My folks are in a position to pay off our mortgage for us early in 2009. It is approx. $155k

We will be repaying them the full amount they spend in doing so, in fixed, monthly payments to them over the next 10-12 years. We will not be selling the house any time soon, and certainly not before we have repaid them in full.

What are the tax implications of such a transaction?

Is there a particular way to do this that minimizes the tax implications to either or both parties?

 

[HomeGuru]

What is the name of your state (only U.S. law)? Texas.

My folks are in a position to pay off our mortgage for us early in 2009. It is approx. $155k

We will be repaying them the full amount they spend in doing so, in fixed, monthly payments to them over the next 10-12 years. We will not be selling the house any time soon, and certainly not before we have repaid them in full.

What are the tax implications of such a transaction?

Is there a particular way to do this that minimizes the tax implications to either or both parties?

**A: please post to the Tax Law forum.

 

[FarmerJ]

If they have a contract for deed drawn up by a atty so they become the lender who you pay after they pay off the loan all parties legal interest would be protected. A tax atty , or the tax accountant can tell them what to expect based on what ever interest rate you pay them.

 

[nextwife]

Treat it as a refinance. Replace your current mortgage with a mortgage to them based on your agreed payback terms.